GlobalFoundries’ tentative assessment is $400M

PHOTOGRAPHER: Stephen Williams

The GlobalFoundries computer chip fabrication plant will be assessed at $400 million under the new tentative Malta tax roll.

The new assessment is up from $160 million last year, and, if it becomes final, would yield tax bills for GlobalFoundries totaling more than $8.4 million.

The $400 million figure is based on an estimate that the massive Fab 8 project was 70 percent complete as of the March 1 taxable status date, said Malta Assessor Sue Otis.

The Sunnyvale, Calif.-based chip giant has challenged last year’s assessment in court and could challenge the new number, as well. The case over last year’s assessment is still pending in state Supreme Court.

GlobalFoundries spokesman Travis Bullard said the company will seek a meeting with town officials before deciding its next move. “It looks like they’ve used a different formula this year so we’d like to meet with the town to get more info on what went into the new assessment. Once we have a chance to meet with the town and get more info, we’ll determine our next steps,” Bullard said Monday.

Based on current property tax rates in Malta, a $400 million assessment would yield annual tax bills for school, county, town and fire protection taxes of more than $8.46 million.

The value of the high-tech manufacturing site dwarfs the value of any other property in either Malta or Stillwater, even though the factory is still under construction.

The factory building is now nearing completion. GlobalFoundries officials expect to start installing manufacturing systems in the building in June in anticipation of starting production in 2012.

GlobalFoundries wasn’t on the tax rolls at all until 2010, because work on Fab 8 didn’t start until the summer of 2009, after the annual March 1 tax status date for that year.

Otis said the $400 million figure was developed in consultation with a team of outside experts the town has retained. They did a walk-through of the property and had discussions with Tim Murphy, the town’s full-time on-site building inspector.

Otis said the assessment was based on an estimate of spending to date and the building’s replacement cost, the same method she uses in assessing all buildings that are still under construction.

Late in the review process, after the tentative assessment had already been determined, Otis said GlobalFoundries notified her that its total spending through March 1 was $699 million.

Otis said the town just wants to be fair to its largest taxpayer.

“We’re trying to be fair. We’re trying to be very fair,” Otis said. “We understand there are some other factors, such as depreciation, because the technology changes so fast.”

A $400 million assessment means GlobalFoundries would receive a school tax bill of $7.2 million, at the current Ballston Spa School District tax rate. Under a pre-existing agreement, the Stillwater school district would receive a quarter of that amount, or $1.8 million.

The 223 acres GlobalFoundries owns at the Luther Forest Technology Campus includes land in both school districts, even though the Fab 8 site is entirely in the Ballston Spa district.

The Ballston Spa School District, in planning its 2011-12 budget, has only counted on receiving $900,000 from GlobalFoundries, said district spokesman Stuart Williams.

That’s because last year’s assessment was challenged, and there’s the possibility the new one will be, too.

“Right now we just have to be conservative,” Williams said.

The $2.2 million GlobalFoundries paid the school last year was placed in a special bank account because of the risk some of it will have to be refunded, Williams said.

Other estimated tax bills, based on current tax rates: Saratoga County, $900,000; fire protection, $327,189; and town of Malta, $7,992.

Release of the tentative assessment starts a public review that will lead to a final assessment being established by July 1. Malta, unlike many communities, assesses properties at 100 percent of their estimated market value.

GlobalFoundries has the right to challenge its assessment through a review process and, if unhappy after that, could file another lawsuit in state Supreme Court.

Whatever the final assessment is, GlobalFoundries is required to pay full local property taxes under its incentive deals with the state and with the Saratoga County Industrial Development Agency.

While the total value of the plant is generally given as $4.6 billion, the sophisticated chip-manufacturing tools that are more than $3.5 billion of the total won’t be subject to municipal property taxes.